The annual proxy for this oil and gas company had the following proposals:
- Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote
- Shareholder proposals on independent chairman, special shareholder meetings, environmental expenditures, petrochemical investments, political contributions, and lobbying
Magni voted as follows:
- For and against proforma proposals.
–For directors – The disclosures in the proxy meet the criteria in Magni’s policy on election of directors.
-For auditors – There appear to be no controversies with the financial statements of the company.
-Against “say-on-pay” – As with last year, the company seems to imply that it ignores the peer group, as none of the members of the peer group are as big. If the company would clarify this, Magni could consider supporting this proposal.
- For and against shareholder proposals.
–For independent chairman – Magni wrote a position paper regarding shareholder proposals for independent chairman.
-For special shareholder meetings– This proposal is the same as the one in last year’s proxy. It seeks to lower the threshold to 10%. Good governance means open communications with shareholders.
-Against environmental expenditures – This proposal is more of a political statement. It wants the company to do more to publicize that the core product of the company has harmful environmental impact. While that is true, the demand for fossil fuel products remains high. There is a need for such products, and this company has one of the best safety and environmental records in this industry. Magni would be supportive of a proposal about more reporting on the performance of the company relative to the industry.
-Against petrochemical investments – This proposal seeks more reporting on investments in remote and/or challenging environments. For the same reasons as the proposal on environmental expenditures, Magni cannot support this proposal.
-Against political contributions – This proposal is similar to the one from last year’s proxy. Magni voted for the proposal last year as the company was relatively opaque about efforts and expenditures. This year, the company has made progress so Magni will vote against the proposal. Continued improvement is required to sustain Magni’s support.
-Against lobbying– As opposed to the above shareholder proposal about political contributions, this proposal focuses a lot of attention on industry and trade organizations. It is in the shareholders’ interest for the company to be active in such groups. A lot of the activities and funding go to issues unrelated to politics.